Tuesday, January 1, 2013

Two hours after the "deadline," the Senate passed a bill preventing automatic middle class tax hikes from taking effect, and forestalling other feared consequences of going over the fiscal cliff. I'm going to leave analysis of the terms of the deal to others. And I will not second guess the negotiators on either side. I happen to think that is extremely poor form.

People who were not in the negotiating room cannot fully appreciate all of the reasons why the deal turned out the way it did.
Therefore, it's best to assume that both sides made the best deal they could. There is no point in comparing this deal to some other hypothetical deal that some second-guessers on either side think they could have achieved if only their superior negotiating skills had been brought to bear. The only question that should be asked is whether the deal made by the leaders we chose, is better than no deal at all. Considering that the bill passed by a margin of 89-8 in the Senate, the answer to that question would seem rather obvious, at least to about 90% of the members of the Senate. The only bills the Senate passes with that kind of margin are the kinds that declare our love of motherhood, the flag, or apple pie.

It makes you wonder why Congress has been fighting over this basic budget question so hard and for so long. Why was it so hard to patch together the kind of solution that was basically baked into the cake at the time of the budget impasse of 2011?

6 comments:

My first thoughts; this bill is not a basic budget question. How could it be? It is almost meaningless in terms of the budget (what budget? We haven't had one in over three years!) The bill is further evidence of power run amok in Washington.

In 6-8 weeks we will see the real negotiating begin. What just happened is depressing and disgusting.

BTW, progressives have spent eight years railing against the Bush tax cuts. Why now are they asking to raise taxes only on the affluent? What happened to progressives?! When did they become the "them but not us party"?

To be very very clear, I am in the 44-88k income bracket and I would pay more if all Bush tax cuts expire. I am willing to do that and I am not a progressive. Repeat, what happened to fairness? Why do progressives single out one group?

I, for one, am very disappointed in this turn of events. All Bush tax cuts should expire or non of them should. Clearly, we better get busy on spending cuts.

It's a basic budget question because it deals with taxes, spending levels and long term deficit reduction. They are working with a ten year time frame so relatively small adjustments now do make a big difference over that time period.

As to why progressives were against the Bush tax cuts then but are for keeping middle class rates lower now, there are two answers. One is that we need to do that to deal with the recession, and two is that people have started noticing the gross disparities of wealth that have built up over the past 30 years or so, and want to do something about that.

As for spending cuts, hardly anybody really wants spending cuts. People might have different spending priorities, but overall nobody really wants to reduce government spending, even if they say they do. And it would be a bad idea to do that, because it would probably cause another recession. Why do you think everyone was so panicked about the fiscal cliff in the first place? If Congress can't make a deal, the stock market will fall so far that it will take more out of everyone's retirement accounts than we are talking about in this whole budget discussion.

<< It's a basic budget question because it deals with taxes, spending levels and long term deficit reduction. >>

Of course, that is untrue. Meaningless on a relative scale.

<< As to why progressives were against the Bush tax cuts then but are for keeping middle class rates lower now, there are two answers. One is that we need to do that to deal with the recession >>

Seriously Joe. C'mon. Yes it is a chip, that is all. We should all pay our relative chips. We have a progressive tax system.

<< and two is that people have started noticing the gross disparities of wealth that have built up over the past 30 years or so, and want to do something about that. >>

This makes no sense at all. Zero. You don't make those making more money to pay workers higher wages by taxing them more. For goodness sakes. Higher wages are what we (me) want; not higher taxes on the wealthy. Do you have a plan? Is it punish the affluent? That seems silly to me. I am not looking for goodies from the Feds. You miss reads us. Nobody wants to do away with Medicare or Social Security. Just clean it up.

Do you own? Do you rent? Do you really undertand my situation? If you do understand, then speak to my needs, and I will respond.

<< Why do you think everyone was so panicked about the fiscal cliff in the first place? If Congress can't make a deal, the stock market will fall so far that it will take more out of everyone's retirement accounts than we are talking about in this whole budget discussion.>>

Most of us in the 44-88k range don't have retirement accounts or stock market accounts. You think you are helping me? You are not.

The vast majority of people making below 44k a yeart have no stock market interests (or negligible). Sometimes I wonder where the left is coming from. They seem an odd mixture of wealthy 60-70s libs (our age) and those making under 44k who feel they need and deserve more from the feds. I don't mean the two groups don't have legitimate interests that we should discuss, but most of the country are men and women like me. We are in the working middle class, busting our butts and doing the right thing; and we are put off by the far left and right. You see the results of this in Michigan and Wisconsin. Why is that? We are ethical. We pay our way and work, right into our late sixties and well beyond if able.

Sorry you're feeling so disaffected Kevin. Personally, I'm cheered up that Congress just passed on a bipartisan basis legislation that most people think will benefit exactly the kinds of people you're talking about. That's pretty admirable when you consider that members of Congress are pulling in opposite directions about how to do that. Also, since you're always railing about how both the left and right care only about their own agendas, you should be cheered up by the fact that the most partisan folks on both the left and right hate this deal and feel that their respective leaders sold them out.

Anyway, it really doesn't matter what the size of your retirement account is, or whether you have any savings at all. If the stock market were to crash again as it did in 2008, that sucks wealth out of the whole economy, and hurts everyone. The amount of that loss would be far greater than the tax increases or spending cuts that Congress has been talking about. Even our dim-witted representatives in Congress all realized that. Which is why they finally came together to try to prevent such a disaster.